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It's Intoxicating, Inc. v. Maritim Hotelgesellschaft Mbh

United States District Court, Third Circuit

July 31, 2013

IT'S INTOXICATING, INC., Plaintiff,
v.
MARITIM HOTELGESELLSCHAFT mbH and DANIELA ZIMMER, Defendants.

MEMORANDUM

MALACHY E. MANNION, District Judge.

Before the court are two consolidated motions filed by defendants Maritim Hotelgesellschaft and Daniela Zimmer, (Doc. No. 23; Doc. No. 32), seeking dismissal of plaintiff's fraud, breach of contract, unjust enrichment, and conversion claims pursuant to Federal Rule 12(b)(6). (Doc. No. 21.) Defendants also move to challenge this court's exercise of personal jurisdiction over defendants Zimmer and Maritim pursuant to Rule 12(b)(2) and venue pursuant to Rule 12(b)(3) and 28 U.S.C. § 1391(b). (Doc. No. 23; Doc. No. 32.) Plaintiff refutes defendants' claim that the court lacks jurisdiction but requests, in the alternative, that the court transfer this matter to the District of New Jersey if the court determines that it cannot exercise personal jurisdiction over the parties. (Doc. No. 33, at 7.) Because jurisdiction and venue are appropriate here, the court will proceed to decide the motion on the merits of plaintiff's complaint. After a thorough review of the record and, viewing the factual allegations of the complaint in the light most favorable to the non-moving party, the court will GRANT IN PART and DENY IN PART the motion.

BACKGROUND

Plaintiff, It's Intoxicating Inc., is a Pennsylvania corporation located in Forty-Fort that manufactures and distributes cosmetic products to various retailers. (Doc. No. 21, at 1.) Defendant Maritim is a German company with a primary business address in Bad Salzuflen but owns hotels throughout Germany. (Doc. No. 21, at 1.) Defendant Zimmer is an individual living in Berlin, Germany, and, as plaintiff alleges in the complaint, is an employee of Maritim who has purportedly been delegated the authority to purchase beauty products on behalf of Maritim. (Doc. No. 21, at 1.)

On October 5, 2007, defendant Zimmer contacted plaintiff by e-mail and explained that Maritim was looking for beauty products to use in several of its hotels. (Doc. No. 21, at 1, 2.) Plaintiff responded via e-mail the same day, providing price lists as well as pictures of the products in which Zimmer expressed interest. (Doc. No. 21, at 2.) On October 11, 2007, Zimmer called plaintiff and asked how long it would take to manufacture and assemble a shipment of specified products if Maritim decided to place an order. (Doc. No. 21, at 2.) Plaintiff responded that same day with information regarding manufacturing and shipping times of various products and also asked Zimmer in an e-mail, three days later, whether Maritim would like assistance forecasting product demand for its hotels. (Doc. No. 1, at 2.)

The parties continued their discussions until October 19, 2007, when Zimmer called to inform plaintiff that Maritim wished to buy its products for use in thirty-eight of its hotels. (Doc. No. 21, at 3.) Zimmer requested that several of plaintiff's products be sold exclusively to Maritim, (Doc. No. 21, at 3), so plaintiff provided Zimmer a twelve month "Exclusivity Agreement, " which the parties subsequently agreed to lengthen to eighteen months at the request of Maritim's CEO. (Doc. No. 21, at 3.) Plaintiff also sent via e-mail a document titled "Conditions of Sale, " a proposed agreement purporting to govern various collateral aspects of the parties' developing relationship. (Doc. No. 21, at 3.) That document stated:

This agreement will be governed by and construed in accordance with the laws of the state of Pennsylvania, United States of America. The parties hereto hereby consent to the exclusive jurisdiction and venue of the United States District Court for Luzerne County for any action that may be brought in connection with this agreement and/or from the use of the Aromapro software and/or from the use of the Aromapothecary products. (Doc. No. 21, at 3.)

On October 22, 2007, plaintiff provided Zimmer price lists for its products, and Zimmer responded by asking plaintiff the "suggested retail prices Maritim should charge [its customers]." (Doc. No. 21, at 4.) Plaintiff also requested an estimate of Maritim's order, but Zimmer explained that Maritim's CEO was currently assessing the company's requirements. (Doc. No. 21, at 4.) Six days later, on October 29, 2007, plaintiff discussed with Zimmer the exact quantity of goods required by Maritim's hotels. (Doc. No. 21, at 4.) Defendant Zimmer followed this call with an e-mail stating that she would send a purchase order and deposit soon. (Doc. No. 21, at 5.)

The parties continued to communicate in the coming weeks about Maritim's confidential sales numbers, payment details, delivery estimates, and further amendments to the exclusivity agreement. (Doc. No. 21, at 5.) On November 24, after revising the exclusivity agreement for the second time, plaintiff requested guidance from Maritim as to whether an order of goods by another German company conflicted with the party's exclusivity agreement. (Doc. No. 21, at 5.) Zimmer looked into the potential agreement, concluded that there was no conflict, and advised plaintiff it could proceed with the sale. (Doc. No. 21, at 5-6.) On December 1, 2007, plaintiff received the amended exclusivity agreement, signed by the CEO of Maritim. (Doc. No. 21, at 6.)

On December 14, 2007, Zimmer called plaintiff to ask if plaintiff had begun manufacturing the products requested in the order. (Doc. No. 21, at 6.) Plaintiff responded that it had not yet received a purchase order from Zimmer but that materials had been ordered and production begun. (Doc. No. 21, at 6.) On January 14, 2008, plaintiff finally received the purchase order and later that month received another order, this time for the Timmendorfer, one of Maritim's individual hotels. (Doc. No. 21, at 6.)

On March 3, 2008, plaintiff shipped 441 cartons of beauty products on eight skids to Maritim Hotel Dusseldorf, one of defendant's hotels located in Dusseldorf, Germany. (Doc. No. 21, at 7.) This shipment consisted of the original order and the subsequent order for the Timmendorfer. (Doc. No. 21, at 7.) On March 14, Maritim received and accepted the shipment at its Dusseldorf location. (Doc. No. 21, at 7.) One month later, plaintiff requested payment for the products and sent Zimmer bank wire details and instructions about how to transmit payment for the March 3 shipment. (Doc. No. 21, at 7.)

On April 28, 2008, Zimmer called to inform plaintiff that a $48, 000 payment was sent via wire. (Doc. No. 21, at 7.) Plaintiff sent an e-mail the same day explaining that payment had not been received, and Zimmer said she would look into the problem the next day. (Doc. No. 21, at 8.) Zimmer sent an e-mail on April 29 requesting a "simple breakdown of charges, " which plaintiff promptly provided. (Doc. No. 21, at 8.) Zimmer also expressed interest in a "new line in-room [sic] amenity products for the 38 Maritim hotels with Maritim logo." (Doc. No. 21, at 7.)

Some time in early May 2008, Maritim began to run into problems selling plaintiff's beauty products. (Doc. No. 21, at 8.) Zimmer e-mailed plaintiff on May 15 "stating that the sell through numbers for the products at the 38 Maritim hotel locations were not really good in April, and she will talk to the CEO before taking steps to increase sales." (Doc. No. 21, at 8.) Plaintiff contacted Zimmer on May 16, asking for a copy of the "sell through numbers" for the hotels and "requesting bank details again ASAP." (Doc. No. 21, at 8.) Plaintiff again sent Zimmer bank wire details and a week later asked whether Zimmer had looked into the wire transfer problem. (Doc. No. 21, at 8.) On June 4, 2008, plaintiff received a call from Zimmer requesting credit for products that were damaged during shipping, and Zimmer forwarded plaintiff to Brigitta Konig, the UPS handler at Maritim hotels. (Doc. No. 21, at 9.) The parties discussed the problem, and plaintiff credited Maritim's account in the amount of $5, 823.60. (Doc. No. 21, at 9.)

On June 5, 2008, plaintiff received, via wire transfer, an additional $25, 724.85 for the March 3 shipment. (Doc. No. 21, at 9.) Plaintiff contacted Zimmer the same day to inquire why Maritim had not wired the entire outstanding amount. (Doc. No. 21, at 9.) On August 28, 2008, after another month had passed without payment, plaintiff asked Zimmer to be connected to Maritim's accounts payable department. (Doc. No. 21, at 9.) Zimmer responded by explaining that she could not provide plaintiff with an accounts payable contact because "her position and salary would be jeopardized if she was to provide such details as a direct contact." (Doc. No. 21, at 9.)

By April 6, 2009, plaintiff still had not received the balance due on the March 2008 shipment. (Doc. No. 21, at 10.) Plaintiff e-mailed Zimmer on April 6, pleading for payment and threatening to approach her superiors. (Doc. No. 21, at 10.) Zimmer explained that forwarding plaintiff to her superiors would have no effect on the situation and recommended plaintiff not approach other Maritim employees. (Doc. No. 21, at 10.) Plaintiff nevertheless contacted a Maritim employee by the name of Ulla Schulz on April 20 and May 4 regarding the outstanding balance, (Doc. No. 21, at 10), but apparently received no response.

Moving ahead to May 14, Brigitta Koenig, another alleged employee of Maritim, e-mailed plaintiff to ask for updated pricing and minimum order requirements for another order to be shipped to the Timmendorfer Hotel. (Doc. No. 21, at 10.) Plaintiff responded with the requested information, and Ms. Koenig requested "a discount on product prices previously sent on May 4, 2009, for the Maritim Timmendorfer Hotel." (Doc. No. 21, at 10.) Plaintiff sent an additional e-mail requesting more information about which products Ms. Koenig was interested in. (Doc. No. 21, at 11.)

On June 2, 2009, Britt Winters, an employee of Maritim, called plaintiff to discuss Maritim's outstanding balance. (Doc. No. 21, at 11.) She asked plaintiff to refrain from discussing the issue with anyone but her and, on June 3, 2009, she explained in an e-mail that she had "relayed the information of outstanding payment to Maritim CEO [to] inquire about the payment." (Doc. No. 21, at 11.) One week later, plaintiff received another e-mail from Winters, this time "stating that Maritim cannot have communication with Plaintiff regarding non-payment as they have been enjoined by the attorney for Zimmer with a letter." (Doc. No. 21, at 11.) Plaintiff requested a copy of the injunction but neither Maritim nor Zimmer has ever provided one. (Doc. No. 21, at 11.) As of the filing of the amended complaint, plaintiff states that no further payment from Maritim has been forthcoming. (Doc. No. 21, at 11.)

Plaintiff claims that defendant Zimmer was, at all relevant times, acting as an agent of Maritim. In support of this conclusion, plaintiff alleges the following facts:

a. Zimmer supplied Plaintiff with complementary hotel rooms at Maritim;
b. Zimmer hosted Maritim events at Maritim hotels;
c. Zimmer provided Plaintiff complimentary food and beverages during all of Plaintiff's stays at Maritim hotels;
d. Zimmer sent Plaintiff complimentary Maritim chauffeurs from airports;
e. Zimmer offered additional complimentary stays at Maritim hotels;
f. Zimmer represented to Plaintiff that Zimmer received salary from Maritim;
g. Plaintiff observed Zimmer in meetings with Maritim directors;
h. Zimmer described to Plaintiff confidential corporate initiatives of Maritim, such as the hotels putting coffee bars in their chain of hotels, and changing from leased spa space to corporate owned/operated space; and
I. Agents of Maritim, other than Zimmer, directly contacted Plaintiff in regard to both the subject contract, as well as other proposed contracts, as set forth above.
j. Those agents of Maritim, communicated directly to Plaintiff, under letterhead and return e-mail address of Maritim, as set forth above;
k. One of those agents of Maritim, that communicated under Maritim letterhead, and Maritim return e-mail address, and in regard to the specifics of the subject contract, is believed to be the mother of Zimmer, as set forth above;
l. It is further believed, and therefore averred that Zimmer, and other members of her family have maintained close personal relationships with the directors of Maritim, for much or all of Zimmer's life.

This motion comes before the court in response to an amended complaint. (Doc. No. 21.) On August 27, 2012, Judge Caputo dismissed plaintiff's original complaint without prejudice for failure to properly plead personal jurisdiction over defendants Zimmer and Maritim. (Doc. No. 20, at 7-8.) More specifically, plaintiff "provided so little detail about its relationship and the alleged contract formation with Maritim that it [could not] be concluded from this evidence that specific personal jurisdiction exists as to Maritim in this forum." (Doc. No. 20, at 8.) As to Zimmer, "plaintiff... simply failed to provide any evidence documenting the frequency, nature, context, or substance of [the] communications." (Doc. No. 20, at 8.) In light of these considerations, the court will now examine the amended complaint to see if plaintiff has properly pleaded jurisdiction, venue, and its substantive claims.

RULE 12(b)(2) & (3) MOTIONS: VENUE AND JURISDICTION

A.) STANDARD OF REVIEW

Rule 12(b)(2) provides for the dismissal of a complaint if the plaintiff fails to establish that the court has personal jurisdiction over the parties. Fed.R. Civ.P.12(b)(2). Rule 12(b)(3), in conjunction with 28 U.S.C. § 1391, requires the court to dismiss the case if the plaintiff fails to show that the district in which the suit is brought is the proper venue. Fed.R.Civ.P. 12(b)(3).

Rule 12(b)(2) requires the court to accept the truth of factual allegations in the complaint relating to jurisdiction and the reasonable inferences that flow therefrom unless the moving party produces evidence tending to contradict the existence of jurisdiction. In re Chocolate Confectionary Antitrust Litigation , 674 F.Supp.2d 580, 595 (M.D.Pa. 2009). In other words, a party may rely entirely on allegations unless and until the moving party presents the court with actual evidence to the contrary. Id .; Miller Yacht Sales, Inc. v. Smith , 384 F.3d 93, 97 (3d Cir. 2004) ("when the court does not hold an evidentiary hearing on the motion to dismiss, ... the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor."); but see, e.g., Rodi v. S. New Eng. Sch. of Law , 255 F.Supp.2d 346, 348 (D.N.J. 2003) ("the plaintiff may not rely on the pleadings, but rather must introduce sworn affidavits or other competent evidence.").

If the moving party does submit competent evidence refuting jurisdiction, the non-moving party shoulders the burden of establishing, by a preponderance of the evidence, that the court has jurisdiction over the matter. In re Chocolate Confectionary Antitrust Litigation , 674 F.Supp.2d at 595 ("Once these allegations are contradicted by an opposing affidavit, however, plaintiffs must present similar evidence in support of personal jurisdiction."). At this point, the plaintiff may not rely on bare pleadings but must support those pleadings with "actual proofs, not mere allegations." Id . (quoting Patterson by Patterson v. FBI , 893 F.2d 595, 603-04 (3d Cir. 1990)). As such, "although the burden of persuasion always lies with the non-moving party, the burden of production rests initially with the party moving for dismissal under Rule 12(b)(2)." Id. at 595, n. 21.

B. THE BURDEN OF PROOF ISSUE

Before turning to the facts of this case, the court must first determine whether plaintiff in this case may establish personal jurisdiction by relying solely on allegations or whether plaintiff must establish evidentiary proof. This question occupies a position of central importance in this case. On August 27, 2012, Judge Caputo determined that plaintiff's initial complaint and affidavit in support of jurisdiction failed to establish personal jurisdiction and dismissed the complaint without prejudice pursuant to Rule 12(b)(2). (Doc. No. 19.) Plaintiff filed an amended complaint of considerable length and detail but has not included evidentiary material in excess of what Judge Caputo considered in dismissing the complaint, only additional allegations. If plaintiff must, under applicable law, produce competent evidence to show jurisdiction, the amended complaint fails because Judge Caputo already determined that plaintiff's affidavit did not provide enough detail about defendants' contacts with the Middle District. If allegations are sufficient, the court must consider jurisdiction anew in light of the fact that the amended complaint contains new allegations. After a review of the 12(b)(2) motions and accompanying briefs of defendants Maritim and Zimmer, the court has determined that neither defendant has presented the court with affidavits or other evidence challenging jurisdiction. As such, the court must consider plaintiff's allegations to determine whether they suffice to establish personal jurisdiction.

C. AGENCY RELATIONSHIP

Before proceeding to the question of personal jurisdiction, it is necessary to determine whether defendant Zimmer was acting as Maritim's agent during the time period in question, or at least whether the allegations raise this as a plausible inference. See Rantnetwork, Inc. v. Underwood, 11-CV-1283, 2012 WL 1021326, *5 (M.D.Pa. 2012) (analyzing agency question first when jurisdiction is premised on agent's contacts with forum). If so, her contacts with the forum state factor into whether Maritim is subject to this court's jurisdiction.

Pennsylvania recognizes four kinds of agency, but all "have three basic features in common: (1) the manifestation by the principal that the agent shall act for him; (2) the agent's acceptance of the undertaking; and (3) the understanding of the parties that the principal is to be in control of the undertaking." Rantnetwork, Inc. v. Underwood, 11-CV-1283, 2012 WL 1021326, *5 (M.D.Pa. 2012). While express authority "is directly granted by the principal to the agent... apparent authority arises from representations that the principal makes to those third parties with whom the agent acts on the principal's behalf." Id . However, "[w]hether the alleged authority is actual, apparent or otherwise, the element of control is the touchstone of a principle-agent relationship." Rantnetwork, Inc. v. Underwood, 11-CV-1283, 2012 WL 1021326, *5 (M.D.Pa. 2012). In the context of a motion to dismiss, "[d]irect proof is unnecessary when the proffered evidence allows an inference of at least an implied intention to create the relationship of principal and agent." Id . Nevertheless, "the mere showing that one person does an act for another does not give rise to an inference that an agency relationship existed." Id.

Under the federal rules, a plaintiff must plead "enough facts from which a plausible claim of an agency relationship can be inferred... not simply assert in conclusory terms that a party is another party's agent for purposes of vicarious liability." Johnson v. Dunkin' Donuts Franchising L.L.C., 2012 WL 1828028, 11-CV-1117 (W.D.Pa. 2012) (interpreting Fed.R.Civ.P. 8). When the agency question is raised in the context of a Rule 12(b)(2) motion, however, the plaintiff's burden is the same as the burden of establishing jurisdiction. Rantnetwork, 2012 WL 1021326, at *5. Therefore, a plaintiff may rely on pleadings alone so long as the defendant has not disputed ...


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